General accounting The average net profits expected in the future by Khalifa andCo. are RO. 30,000 per year. The average capital employed inthe business by the firm is RO. 200,000. The normal rate ofreturn on the capital employed in a similar business is 10%.Calculate goodwill of the firm by:1. Super Profit Method on the basis of two-year purchase.2. Capitalization Method.

Step 1: Define GoodwillIt arises when one entity acquires another entity by paying a consideration…

Answered: The average net profits expected in the…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 9MC

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The following details relate to M/s XYZ, a firm: Average profit of last four years = $7,00,000 Average capital employed by the firm: $55,00,000 Normal rate of return :10% Present value of annuity of $1 for 4 years @ 10% : 3.1699 Determine the value of goodwill on the basis of annuity of super profit.
The profits of firm for the five years are as follows: Year Profit (Rs.) 2012-13 20,000 2013-14 24,000 2014-15 30.000 2015-16 25.000 2016–17 8,000 Calculate the value of goodwill on the basis of three years' purchase of weighted average profits based on weights 1,2,3,4 and 5 respectively.
Please help correctly wirh steps and explanation.
Use the following information to answer the next question. Total Asset = $40 million Basic earning power (BEP) ratio is 20% Times-interest-earned (TIE) Principal payments = 4 million ratio is 6.55 $1.35 million; $0.37 million What is the company's EBIT? The company's interest expense? $3.33 million; $0.83 million $8.0 million; $0.62 million Depreciation = $1.0 million. $7.5 million; $0.75 million Lease payments = 0.6 million $8.0 million; $1.22 million
Need both answer
How much is the intrinsic value of GWAPO Corporation if the required return for this business is 12%? (Use 5 decimal places for Present Value factors)
Please help me to solve this problem
A company is considering a $168,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. (PV of $1, FV of $1, PVA of $1. and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net Cash Flow (a) Compute the net present value of this investment. (b) Should the machinery be purchased? Year Year 11 Year 2 Year 1 $10,000 Complete this question by entering your answers in the tabs below. Year 3 Year 4 Year 5 Totals Initial investment Net present value Required A Required B Compute the net present value of this investment. (Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar.) Year 2 $29,000 Net Cash Flows $ 0 Present Value Factor Year 3 $55,000 Present Value of Net Cash Flows $ $ Required A Year, 4 $42,000 0 0 Year 5 $113,000 Required >
Mari Mari Berhad has sales of RM29,000, total assets of RM17,500, and total debt of RM6,300. If the Net Profit Margin is 9%; a) What is the Net Income ? b) What is the Return on Asset ? c) What is the Return on Equities ?
A company is considering a $153,000 Investment in machinery with the following net cash flows. The company requires a 10% return on Its Investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net Cash Flow (a) Compute the net present value of this Investment. (b) Should the machinery be purchased? Year 1 $9,000 Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 2 $26,000 Complete this question by entering your answers in the tabs below. Totals Initial investment Net present value Required A Required B Compute the net present value of this investment. (Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar.) Net Cash Flows Year 3 $50,000 Year 4 $38,000 Present Value Present Value of Factor Net Cash Flows
1a.Compute the net present value of this investment.b. Should Beyer accept the investment?
A company is considering a $150,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. (PV of $1. EV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) Year Year 1 $10,000 Year 1 Year 2 Year 3 Year 4 Year 5 Net cash flows (a) Compute the net present value of this investment. (b) Should the machinery be purchased? Complete this question by entering your answers in the tabs below. Totals Initial investment Net present value Year 2 $25,000 Year 3 $50,000 Required A Required B Compute the net present value of this investment. (Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar) Net Cash Flows Year 4 $37,500 Present Value Present Value of Factor Net Cash Flows

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